Jeroen van der Veer has won a victory over his more lauded rival Lord Browne by being allowed to stay on as chief executive of Shell a year after the company's retirement date. The Dutchman will retire on June 30, 2009, aged 61, whereas the BP boss will have to go this summer at 60, after losing his internal battle to stay.

"There has been great progress in our company in recent years. Jeroen's decision today provides clarity, and I am most pleased that he will stay on longer, providing valuable continuity and leadership in Shell over the next years," said Jorma Ollila, Shell's chairman.

Mr van der Veer, who is expected to leave with a £10m-plus pension pot, said he was delighted to continue with his tenure. "I am keen to further progress our delivery and growth agenda." He has lived in the shadow of his charismatic rival as he tried to rebuild confidence in Shell after the 2003 reserves scandal which led to the downfall of his predecessor, Sir Philip Watts.

Lord Browne - having won a series of awards as industrialist of the year - has seen his reputation tarnished over the last 12 months, most notably as a result of the Texas City refinery explosion. This, plus Alaskan pipeline spills and propane trading scandals, have hit BP's share price while Shell's has recovered as Mr van der Veer led Shell to record profits, its largest takeover with the full acquisition of its Canadian business, and negotiated the Sakhalin-2 share sale in Russia.

The reshuffle at the top of Shell means change at the top of the three main western oil firms, with Lee Raymond having stepped down last year at ExxonMobil.

There will be a struggle to replace Mr van der Veer among the three managing directors: Malcolm Brinded, head of exploration, Linda Cook at gas and power, and finance director Peter Voser. Mr Brinded, 54, has been seen as a frontrunner but might be vulnerable over North Sea safety after revelations an internal audit found violations of safety procedures and the alleged falsification of compliance documents. Shell denied the latter charge.